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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Annual Report and Accounts Year ended 31 March 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

The Accountable Officer has authorised these financial statements for issue on 30 September 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Contents Management commentary

4

Remuneration report

9

Statement of Board's and National Convener/Chief Executive's responsibilities

14

Governance statement

15

Independent auditor’s report

18

Statement of Comprehensive Net Expenditure

21

Statement of Financial Position

22

Statement of Cash Flows

23

Statement of Changes in Taxpayers’ Equity

24

Notes to the accounts

25

Annex 1 – Direction by the Scottish Ministers

37

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Management commentary 1. Background Children’s Hearings Scotland (CHS) is a Non-Departmental Public Body (NDPB), which was established under the Children’s Hearings (Scotland) Act 2011. CHS came into existence on 4 July 2011 with the primary statutory function of supporting the delivery of National Convener functions associated with the recruitment, selection, training, retention and support of panel members. CHS is accountable to the Scottish Ministers and to the Scottish Parliament through the Care and Justice Division in the Children and Families Directorate. Sponsorship responsibility rests with the Children, Young People and Social Care Directorate’s Workforce and Capacity Issues Division. CHS is subject to a Management Statement and Financial Memorandum agreed with its sponsor department. CHS is wholly financed by grant-in-aid. CHS’ Head Office is located at 2/1/1, Ladywell House, Ladywell Road, Edinburgh EH12 7TB.

2. Financial results In the year ended 31 March 2013, CHS reported expenditure of £1.151 million (2012: £0.528 million) against revenue grant-in-aid of £1.250 million (2012: £0.750 million). The activities associated with the establishment of a new body involve a degree of unpredictability and the underspend reflects this. The General Fund has a surplus of £0.321 million as at 31 March 2013 (2012: £0.222 million). The Board of CHS has no reason to believe that the department’s future sponsorship and future ministerial approval will not be forthcoming or will only provide a reduced support to CHS. Given the above it is considered appropriate to adopt a going concern basis for the preparation of these financial statements. In accordance with IAS 19 ‘Employee Benefits’ the financial statements reflect at fair value the assets and liabilities arising from CHS’ retirement benefit obligations. As a result CHS has a deficit of £0.02 million (2012: £0.003 million) on its pension reserve at 31 March 2013.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

3. Review of principal activities During 2012/13, CHS’ principal activities were those required to establish CHS as an efficient and effective NDPB and to create the local Area Support Teams (ASTs); key activities crucial to ensure a smooth transition to the national Children’s Panel on 24 June 2013. Key areas of focus included: • • • • • •

working with the Scottish Government and local authorities with a view to delivering a seamless transition of duties and functions to CHS and the National Convener finalising Partnership Agreements with local authorities and establishing AST structures, roles and responsibilities determining the arrangements for the provision of advice to children’s hearings to help panel members make legally sound decisions undertaking a joint initiative with Scottish Children’s Reporter Administration (SCRA) to explore hearings practice management and agree national protocols developing and implementing a suite of corporate governance policies and procedures which reflect best practice and support the work of CHS understanding the views and experiences of children and young people in the Children’s Hearings System to ensure that they inform our work

The activities undertaken in 2012/13 contribute towards achieving CHS’ mission to improve outcomes and experiences for children and young people in Scotland who may be at risk. We will do this by supporting the Children’s Panel, working with partners and using our influence to drive improvements across the Children’s Hearings System. CHS also contribute to the Scottish Government’s national outcomes by working to accomplish our corporate outcomes as set out in our Corporate Plan 2012-2015: • • • •

hearings are centred around the child or young person where their rights and those of their families are respected and upheld panel members feel valued, respected, supported and well trained to make and record consistent, sound decisions in the best interests of children and young people outcomes for children and young people in the Children’s Hearings System are improved by working together with partners in a whole systems approach CHS is an effective, efficient and enabling organisation that meets the needs of its stakeholders

CHS is committed to measuring and reporting on progress towards delivery of our outcomes. Our performance management framework is linked to the CHS vision, mission and values and our corporate and business plans. Our performance management framework will track how well CHS is doing to deliver our goals as set out in these plans, and how we are performing as an organisation, through a suite of key performance indicators (KPIs).

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

CHS uses a balanced scorecard to measure performance, which provides a 360 degree overview of the work of CHS. The current balanced scorecard contains a draft suite of key performance indicators for the functions which CHS carried out in 2012/13.

4. Future developments in activities For the financial year 2013/14 CHS has been allocated revenue grant-in-aid of £3.3 million (2012/13: £3 million per prior accounts, revised to £1.25 million). This grant will be allocated in full toward CHS’ activities during 2013/14 which will work towards achieving the four outcomes set out in the Corporate Plan 2012-2015.

Priority areas of focus for 2013/14 In working to deliver these four outcomes, CHS set out seven business objectives to be achieved in the 2013/14 Business Plan: • • • • • • •

establish mechanisms and resources for capturing the views and experiences of children and young people in the Children’s Hearings System put in place infrastructure to ensure continuous support to panel and AST members establish mechanisms to ensure readiness for the delivery of new provisions under the Children’s Hearings (Scotland) Act 2011 (the 2011 Act) build effective and purposeful relationships with partners and stakeholders establish effective governance arrangements for CHS develop strategies and resources to communicate and engage effectively with all our stakeholders make the most of our people

5. Board members Board Members in 2012/13

Date of appointment

End of appointment

Craig Spence (Chair)

18 April 2011

31 March 2014

John Anderson

11 March 2013

30 June 2015

Brian Baverstock

4 July 2011

30 June 2014

Alastair Hamilton

4 July 2011

30 June 2014

Marian Martin

11 March 2013

30 June 2015

Andrew Thin

4 July 2011

30 June 2014

Linda Watt

4 July 2011

30 June 2014

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

The Board members have been appointed by the Scottish Ministers. They are appointed on the basis of having knowledge or experience relevant to the general purpose and specific requirements of CHS or to the functions of the National Convener/Chief Executive.

6. Equalities CHS is committed to a Single Equality Scheme and will meet the General and Specific duties for public bodies. Whilst we will continue to address the need and right of all employees to be treated with respect and dignity, CHS will develop good equality outcomes as well as equality impact assess all decision-making procedures and policies/practices that affect both internal and external services users. Employment and equal pay data statistics and results will be regularly published and appropriate action plans agreed.

7. Audit The Public Finance and Accountability (Scotland) Act 2000 places personal responsibility on the Auditor General for Scotland to decide who is to undertake the audit of each central government body in Scotland. For the financial years 2011/12 to 2015/16 the Auditor General appointed PricewaterhouseCoopers LLP to undertake the audit of CHS. The general duties of the auditors of central government bodies, including their statutory duties, are set out in the Code of Audit Practice issued by Audit Scotland and approved by the Auditor General.

8. Consultation with employees CHS has adopted the principles of openness and participation in the organisation. This is supported by providing access to management papers, through oral briefings and by staff meetings. Information is only withheld where this can be shown to be justified or where a duty of confidence is owed to a third party.

9. Payment performance In line with Scottish Government guidance CHS’ policy is to pay all invoices, not in dispute, within the lesser of 10 working days and the agreed contractual terms. During the year ended 31 March 2013 CHS paid 99% (95%) of all invoices within the terms of its payment policy.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

10. Staff absence In the year to 31 March 2013 average staff absence was 5.4 days (9.5 days).

11. Sustainability CHS will develop an Environmental Policy which sets out the organisation’s commitment to the environment and CHS’ contribution to the Scottish Government’s ‘Greener Scotland’ strategic objective. CHS has introduced video conferencing facilities and introduced a Flexible Working Strategy with a view to reducing the revenue and environmental costs associated with travel and office space.

12. Register of Interests A Register of Interests for Board members and senior staff is maintained by CHS and may be accessed by contacting the Director of Finance and Corporate Services at 2/1/1 Ladywell House, Ladywell Road, Edinburgh, EH12 7TB.

Bernadette Monaghan Accountable Officer Date: 19 September 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Remuneration Report 1. Unaudited remuneration report Remuneration and Appointments Committee The Remuneration and Appointments Committee, a sub-committee of the full CHS Board, oversees the remuneration and performance management arrangements of all staff.

Membership of Remuneration Committee For the financial year under review, the Remuneration and Appointments Committee consisted of: • • •

Craig Spence (Chair of committee from 15 July 2011 - 13 June 2012) Alastair Hamilton (Chair of committee from 13 June 2012, member from 15 July 2011 ) Linda Watt (member from 15 July 2011)

Policy on remuneration of senior managers Proposals on the remuneration of the National Convener/Chief Executive are made by the Remuneration and Appointments Committee and form the basis of recommendations to the Scottish Government. Proposals in relation to remuneration of other senior managers and staff remuneration are included in a pay and grading remit, which is submitted to the Scottish Government for approval following approval by the Remuneration and Appointments Committee. CHS’ overall remuneration policy aims to: • • •

attract, retain and motivate competent and skilled staff at all levels of the organisation ensure that salaries are as competitive as possible reward staff for their contribution to CHS by arrangements which are simple, fair and transparent

Service contracts Unless otherwise stated below, the officials covered by this report hold appointments which are open-ended. The notice period for senior managers is three months. Any payment in relation to termination of employment through retirement or redundancy is governed by CHS’ relevant policies

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

and procedures. Any discretionary payment made to any member of staff on termination is subject to approval by the Board and/or Scottish Government.

2. Audited remuneration report Senior managers’ service contracts Bernadette Monaghan

Date of contract

Unexpired term Notice period

01 April 2011

Fixed term contract to 31 March 2016

National Convener/Chief Executive

Fiona Greig

14 December 2011

3 months

09 January 2012

3 months

Director of Finance and Corporate Services

Alison Gough Director of Panel and Area Support Teams

Remuneration

Salary and allowances 2011/12 £000

Salary and allowances 2012/13 £000

National Convener/Chief Executive Bernadette Monaghan

80-85

80-85

Executive Management Team Alison Gough 1

10-15

55-60

15-20

55-60

20-25 0 0-5 5-10 0 0-5 5-10

20-25 0-5 0-5 5-10 0-5 0-5 0-5

Director of Panel and Area Support

Fiona Greig 2 Director of Finance and Corporate Services

Non-Executive Board Members Craig Spence John Anderson (from 11 March 2013) Brian Baverstock Alastair Hamilton Marian Martin (from 11 March 2013) Andrew Thin Linda Watt  

1 2

2011/12 comparatives are for 3 months only 2011/12 comparatives are for 4 months only

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Mid-point of highest paid director’s total remuneration

£67,500

£67,500

Median total remuneration

£30,610

£30,610

2.3

2.3

Ratio

Reporting bodies are required to disclose the relationship between the remuneration of the highestpaid director in their organisation and the median remuneration of the organisation’s workforce. The banded remuneration of the highest-paid director in CHS in the financial year 2012/13 was (£65,000-70,000) (2011/12: £65,000-70,000). This was 2.3 (2011/12: 2.3) times the median remuneration of the workforce which was £30,610 (2011/2012: £30,610). In 2012/13 no employees received remuneration in excess of the highest-paid director. No benefits in kind were received in 2012/13. CHS does not have a separate performance pay scheme for senior managers. The Scottish Government-wide remuneration policy is applied equally to all staff including senior management.

Benefits in Kind The monetary value of benefits in kind covers any benefits provided by the employer and treated by HMRC as a taxable emolument.

Compensation CHS made no compensation payments to any members of the senior management team.

Special Payments A special payment of £0-2,500 was made to an employee. This payment was approved by Scottish Government in accordance with CHS’ delegated authority.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Senior managers' pension entitlements

Senior Management Team Members

Real increase in pension in year to 31 March 2013

Real increase in lump sum in year to 31 March 2013

Total Accrued pension as at 31 March 2013

Total accrued lump sum at 31 March 2013

0-2.5

0-2.5

0-5

0-5

14

28

14

0-2.5

0-2.5

5-10

5-10

3

87

843

0-2.5

0-2.5

0-5

0-5

2

11

9

Real increase in pension in year to 31 March 2012

Real increase in lump sum in year to 31 March 2012

Total Accrued pension as at 31 March 2012

Total accrued lump sum at 31 March 2012

0-2.5

0-2.5

10-15

0-5

0-2.5

0-2.5

0-5

0-2.5

0-2.5

0-5

£000

Bernadette Monaghan

£000

£000

£000

CETV at 31 March 2012

£000

CETV at 31 March 2013

£000

Real increase in CETV during year

£000

National Convener/Chief Executive

Fiona Greig Director of Finance and Corporate Services

Alison Gough Director of Panel and Area Support

Prior year comparatives

Senior Management Team Members

£000

Bernadette Monaghan

£000

£000

CETV at 31 March 2012

Real increase in CETV during year

0

14

14

0-5

0

3

3

0-5

0

2

2

£000

CETV at 31 March 2011

£000

£000

£000

National Convener/Chief Executive

Fiona Greig Director of Finance and Corporate Services

Alison Gough Director of Panel and Area Support 

3

Membership transferred from Falkirk Council in year

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

CHS does not make any contribution to the Local Government Pension Scheme, nor provide any other form of pension benefit, in respect of any Non-Executive Board Member.

Amounts payable to third parties for the services of a senior manager CHS paid Scottish Government £55,000-60,000 (2011/12: £20,000-25,000) in respect of the services of Kit Wyeth, project manager, from the period 1 April 2012 to 23 December 2012.

Bernadette Monaghan Accountable Officer Date: 19 September 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Statement of Board’s and National Convener/Chief Executive’s responsibilities Section 21(1) of the Children’s Hearings (Scotland) Act 2011 requires CHS to prepare a statement of accounts for each financial year in the form and on the basis determined by the Scottish Ministers. The accounts are prepared on an accruals basis and must give a true and fair view of CHS’ state of affairs at the year-end and of its income and expenditure, total recognised gains and losses, and cash flows for the financial year. Under section 15 of the Public Finance and Accountability (Scotland) Act 2000 the Principal Accountable Officer of the Scottish Government appointed the National Convener/Chief Executive of CHS as its Accountable Officer. As Accountable Officer, the National Convener/Chief Executive is responsible to the Scottish Ministers. In preparing the accounts the Accountable Officer is required to comply with the ‘Government Financial Reporting Manual’, and in particular to: •

• •

observe the accounts direction issued by the Scottish Ministers, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis make judgements and estimates on a reasonable basis state whether applicable accounting standards have been followed as set out in the ‘Government Financial Reporting Manual’, and disclose and explain any material departures in the financial statements prepare the financial statements on the going concern basis, unless it is inappropriate to presume that CHS will continue in operation

The responsibilities of the Accountable Officer, including responsibility for the propriety and regularity of the public finances for which the Accountable Officer is answerable, for keeping proper records and for safeguarding CHS assets are set out in the Memorandum to Accountable Officers from the Principal Accountable Officer.

Bernadette Monaghan Accountable Officer Date: 19 September 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Governance statement Statement of governance Scope of responsibility As Accountable Officer, I have responsibility for maintaining a sound system of internal control that supports the achievement of CHS’ policies, aims and objectives, as set by Scottish Ministers, whilst safeguarding the public funds and assets for which I am personally responsible, in a accordance with the responsibilities assigned to me in the Memorandum to Accountable Officers for Other Public Bodies.

Governance framework CHS’ governance framework accords with generally accepted best practice principles and guidance from Scottish Ministers in the Scottish Public Finance Manual and has been in place for the financial year ended 31 March 2013 and up to the date of the approval of the annual report and accounts. CHS has a Board which meets at least every two months to consider the overall strategic direction of CHS within the policy, planning and resources framework determined by the Scottish Ministers. The Board focuses on achievement of corporate objectives, performance, implementation of strategic projects, effective use of resources and management of strategic risks. The Board Committee structure comprises an Audit and Risk Management Committee and a Remuneration and Appointments Committee. The Audit and Risk Management Committee meets quarterly and is responsible for providing the Board and Accountable Officer with advice and assurance about the arrangements for: • • •

risk management financial control and reporting legal and regulatory compliance

The Committee scrutinises all audit reports and the actions taken by managers in response to audit recommendations.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

The Remuneration and Appointments Committee also meets quarterly and reviews the arrangements for: • • •

the performance management of the Chief Executive and other senior staff the recruitment and remuneration of all CHS employees ensuring that appropriate employment policies are in place

CHS has an internal audit service provided under contract, which operates to standards defined in the Government Internal Audit Manual. During the year Internal Audit undertook reviews of Budget Setting and Monitoring, Risk Management and undertook an ICT health check (Data Security). Internal Audit submitted reports containing recommendations for improvement to the Audit and Risk Management Committee on each of these areas. The internal audit annual report concluded that CHS has a framework of controls in place that provides reasonable assurance regarding the effective and efficient achievement of CHS’ reports included an independent opinion on the adequacy and effectiveness of CHS’ system of internal control, together with recommendations for improvement.

Operation of the Board The Board met 10 times during 2012/13 as well as holding three Board development days and a joint meeting with the Board of SCRA. Key issues for the Board in 2012/13 were the establishment of CHS, including oversight of the critical workstreams required to ensure CHS’ readiness for go-live on 24th June 2013, development and implementation of a Board Strategic Engagement Strategy and ensuring that robust governance, risk, and project management frameworks are in place.

Assessment of corporate governance arrangements As Accountable Officer, I have reviewed the effectiveness of corporate governance arrangements. My review is informed by: •

the executive managers within CHS who have responsibility for the development and maintenance of the internal control framework, including the organisation’s Senior Information Risk Officer the work of the internal auditors who submit to the Audit and Risk Management Committee regular reports which include the Head of Internal Audit’s independent and objective opinion on the adequacy and effectiveness of CHS’ system of internal control together with any

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

• •

recommendations for improvement comments made by the external auditors in their management letter and other reports assurances from senior staff in CHS’ 2012/13 Certificate of Assurance which was submitted to the Sponsor Division as part of the Scottish Government’s Certificates of Assurance process

Risk management arrangements A framework for identifying, measuring, controlling and monitoring strategic risks has been in place throughout the financial year. A regular review of the Strategic Risk Register is undertaken by the Senior Management Team and the Strategic Risk Register is reported to the Audit and Risk Management Committee on a quarterly basis. Strategic risk management is embedded in CHS’ corporate planning and project management processes. The key strategic risks identified during 2012/13 included the risk that agreement may not be reached with local authorities in respect of the establishment of ASTs, and the risk that not enough panel members transfer to the national Panel to ensure continuity of service delivery beyond the implementation of the 2011 Act.

Significant issues A significant risk to CHS which was escalated to the Children’s Hearings Reform Implementation Board was that the National Convener failed to obtain consent from all local authorities for the establishment of ASTs. Failure to achieve consent, as required by the 2011 Act and to conclude signing of Partnership Agreements with all local authorities would have made it likely that the go-live date of 24th June 2013 would have to be postponed with serious consequences for the Children’s Hearings System. All Partnership Agreements were signed by 28th February 2013 and there was no impact on the go-live date.

Data security Internal Audit conducted a review of Data Security and made a number of recommendations which are being implemented by CHS. There have been no lapses of data security.

Bernadette Monaghan Accountable Officer Date: 19 September 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Independent auditor’s report Independent auditor’s report to the members of Children’s’ Hearing Scotland, the Auditor General for Scotland and the Scottish Parliament We have audited the financial statements of Children’s Hearings Scotland for the year ended 31 March 2013 under the Children’s Hearings (Scotland) Act 2011. The financial statements comprise the Statement of Comprehensive Net Expenditure, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Taxpayers’ Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union, and as interpreted and adapted by the 2012/13 Government Financial Reporting Manual (the 2012/13 FReM). This report is made solely to the parties to whom it is addressed in accordance with the Public Finance and Accountability (Scotland) Act 2000 and for no other purpose. In accordance with paragraph 125 of the Code of Audit Practice approved by the Auditor General for Scotland, we do not undertake to have responsibilities to members or officers, in their individual capacities, or to third parties.

Respective responsibilities of Accountable Officer and auditor As explained more fully in the Statement of the Accountable Officer’s Responsibilities the Accountable Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and is also responsible for ensuring the regularity of expenditure and income. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) as required by the Code of Audit Practice approved by the Auditor General for Scotland. Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. We are also responsible for giving an opinion on the regularity of expenditure and income in accordance with the Public Finance and Accountability (Scotland) Act 2000.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the body’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Accountable Officer and the overall presentation of the financial statements. It also involves obtaining evidence about the regularity of expenditure and income. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements, irregularities, or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements: •

• •

give a true and fair view in accordance with the Children’s Hearings (Scotland) Act 2011 and directions made thereunder by the Scottish Ministers of the state of the body’s affairs as at 31 March 2013 and of its net operating cost for the year then ended have been properly prepared in accordance with IFRSs as adopted by the European Union, as interpreted and adapted by the 2012/13 FReM have been prepared in accordance with the requirements of the Children’s Hearings (Scotland) Act 2011 and directions made thereunder by the Scottish Ministers.

Opinion on regularity In our opinion in all material respects the expenditure and receipts in the financial statements were incurred or applied in accordance with any applicable enactments and guidance issued by the Scottish Ministers.

Opinion on other prescribed matters In our opinion: •

the part of the Remuneration Report to be audited has been properly prepared in accordance with the Children’s Hearings (Scotland) Act 2011 and directions made thereunder by the Scottish Ministers the information given in the Management Commentary for the financial year for which the financial statements are prepared is consistent with the financial statements

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Matters on which we are required to report by exception We are required to report to you if, in our opinion: • • • •

adequate accounting records have not been kept the financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records we have not received all the information and explanations we require for our audit the Governance Statement does not comply with guidance from the Scottish Ministers

We have nothing to report in respect of these matters. PricewaterhouseCoopers LLP Glasgow

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Children’s Hearings Scotland Statement of Comprehensive Net Expenditure for the year ended 31 March 2013 Note

Expenditure Staff costs Other administration costs

Net expenditure before Scottish Government funding

Year to 31 March 2012 £000

2 3

674 478 1,152 1,152

221 307 528 528

7

(1)

0

1,151

528

Net expenditure Other finance income

Year to 31 March 2013 £000

The notes on pages 25 to 36 form part of these accounts

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Children’s Hearings Scotland Statement of Financial Position as at 31 March 2013 Note

2013 £000

2012 £000

Non-current assets Pension asset Total non-current assets

7

0 0

1 1

Current assets Trade and other receivables Cash and cash equivalents Total current assets

4 5

22 461 483

12 377 389

483

390

174 174

171 171

309

219

8

0

Assets less liabilities

301

219

Taxpayers’ equity General fund Pension reserve

321 (20)

222 (3)

Total taxpayers’ equity

301

219

Total assets Current liabilities Trade and other payables Total current liabilities

6

Non-current assets plus net current assets Non-current liabilities Pension liability

7

The notes on pages 25 to 36 form part of these accounts The financial statements set out on pages 21 to 24 were approved by the Board on 18 September 2013 and signed on its behalf by

Bernadette Monaghan Accountable Officer Date: 19 September 2013

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Children’s Hearings Scotland Statement of Cash Flows for the year ended 31 March 2013 Note

2013 £000

2012 £000

(1,151)

(528)

Cash flows from operating activities Net expenditure before Scottish Government funding Adjustments for non-cash items (Decrease)/Increase in pension fund asset

7

9

(1)

Decrease in pension reserve

7

(17)

(3)

Increase in trade and other receivables

4.1

(10)

(12)

Increase in trade and other payables

6.1

3

171

(1,166)

(373)

1,250

750

84

377

Movements in working capital

Net cash outflow from operating activities Cash flows from financing activities Scottish Government funding for year Net increase in cash and cash equivalents The notes on pages 25 to 36 form part of these accounts

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Children’s Hearings Scotland Statement of Changes in Taxpayers’ Equity for the year ended 31 March 2013 Note

General Fund £000

Pension Reserve £000

Total Reserves £000

0

0

0

0

(3)

(3)

Net expenditure for the year

(528)

0

(528)

Total recognised income and expense for 2011/12

(528)

(3)

(531)

Funding from Scottish Government

750

0

750

Balance at 31 March 2012

222

(3)

219

General Fund £000

Pension Reserve £000

Total Reserves £000

222

(3)

219

0

(17)

(17)

(1,151) (929)

0 (20)

(1,151) (949)

1,250

0

1,250

321

(20)

301

Balance at 4 July 2011 Actuarial loss on pension reserve

7

Note

Balance at 1 April 2012 Actuarial loss on pension reserve

7

Net expenditure for the year Total recognised income and expense for 2012/13 Funding from Scottish Government Balance at 31 March 2013

The notes on pages 25 to 36 form part of these accounts

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Notes to the accounts 1. Accounting policies 1.1 Basis of accounting The accounts have been prepared in accordance with the accounting principles and disclosure requirements of the 2012/13 ‘Government Financial Reporting Manual’. The accounting policies contained in the manual follow International Financial Reporting Standards (IFRS) as adopted by the European Union and the Companies Act to the extent that it is meaningful and appropriate in the public sector context and in accordance with the Accounts Direction given by the Scottish Ministers. Where the manual permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of CHS for the purposes of giving a true and fair view has been selected. The accounting policies selected have been applied consistently in dealing with items that are considered material in relation to the accounts.

1.2 Accounting convention These accounts have been prepared under the historical cost convention modified to account for the revaluation of property, plant and equipment and intangible assets to fair value as determined by the relevant accounting standard.

1.3 Property, plant and equipment The threshold for capitalisation of property, plant and equipment is £5,000, including nonrecoverable VAT. Individual items of plant and equipment whose cost falls below the threshold, but are of a similar nature, are grouped and capitalised. Expenditure on furniture, fixtures and fittings is charged to the statement of net expenditure in the year the cost is incurred and is not capitalised. Given the short useful economic lives and low values of property, plant and equipment and intangible assets, these assets are disclosed on a depreciated historical cost basis, which is used as a proxy for fair value.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Depreciation is provided on all property, plant and equipment on a straight line basis, at rates calculated to write-off the cost, less estimated residual value, of each asset over its expected useful life as follows: • •

ICT equipment – three years office equipment – five years

1.4 Intangible assets Intangible assets are non-monetary assets without physical substance which are capable of being sold separately from the rest of CHS’ business or which arise from contractual or other legal rights. They are recognised only where it is probable that future economic benefits will flow to, or service potential be provided to, CHS and where the cost can be measured reliably. Intangible assets that meet the recognition criteria are capitalised where they are capable of being used in CHS’ activities for more than one year and they have a cost of at least £1,000 including nonrecoverable VAT. The main classes of intangible assets recognised are: •

acquired computer software licences

Software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised using the straight-line method over the shorter term of life of licence and its estimated useful economic life. The Scottish Government retains the title to all software purchased for use on SCOTS assets.

1.5 Employee benefits CHS has an agreement with Edinburgh City Council under which all staff are eligible to enter the Local Government Pension Scheme managed by the Council in accordance with scheme rules. It is a defined benefit scheme providing pension benefits and life assurance for all staff members. The defined benefits pension scheme’s assets are included at market value and this is compared to the present value of the scheme liabilities using a projected unit method and discounted at a rate in accordance with the FReM and consistent with IAS 19. The increase in the present value of the liabilities of the scheme expected to arise from employee service in the period is charged to net expenditure. The expected return on the scheme’s assets and the increase during the period in the

26


Children’s Hearings Scotland | Annual Report and Accounts 2012/13

present value of the scheme’s liabilities arising from the passage of time are included in other finance income. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to reserves and are recognised in the Statement of Changes in Taxpayers’ Equity. The contributions are determined by a qualified actuary on the basis of triennial valuations using the projected accrued benefit method. The valuation used was at 31 March 2011. Details of this valuation were included in a report published by Lothian Pension Fund. The contribution rates for 2012/13 were an average of 7.1% by employee and 19.1% by employer.

Short-term employee benefits Salaries, wages and employment-related payments are recognised in the year in which the service is received from employees. The cost of annual leave and flexible working time entitlement earned but not taken by employees at the end of the year is recognised in the financial statements.

1.6 Income CHS does not undertake any activities which generate income.

1.7 Leases CHS occupies office space within a Scottish Government owned building under a Memorandum of Terms of Occupation (MOTO). This arrangement is treated as an operating lease and the rental is charged to the Statement of Comprehensive Net Expenditure on a straight line basis over the term of the MOTO.

1.8 Government grants It is CHS’ policy to credit all government grants and grant-in-aid to the General Reserve in line with the FReM.

1.9 Financial Instruments Cash requirements for CHS are met through the Scottish Government and therefore financial instruments play a more limited role in creating and managing risk than would apply within a nonpublic sector body. The majority of financial instruments relate to receivables and payables incurred

27


Children’s Hearings Scotland | Annual Report and Accounts 2012/13

through the normal operational activities of CHS. CHS is therefore exposed to little credit, liquidity or market risk.

1.10 Value Added Tax CHS has no chargeable activities within the scope of VAT. Irrecoverable VAT is charged to the relevant expenditure category or included in the capitalised purchase cost of fixed assets.

1.11 Provisions Provision is recognised in the statement of financial position when there is a present legal or constructive obligation as a result of a past event and it is probable that an outflow of economic benefits will be required to settle the obligation.

1.12 Related Party Transactions Material related party transactions are disclosed in line with the requirements of IAS 24.

2. Staff numbers and related costs 2.1 Staff costs – staff with a permanent (UK) employment contract

Salaries Social security costs Contributions to pension scheme

2012/13 £000

2011/12 £000

367 31 64

152 13 22

462

187

2012/13 £000

2011/12 £000

208 2 3

34 0 0

212

34

2.2 Staff costs – other staff

Salaries Social security costs Contributions to pension scheme

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

2.3 Staff costs – all staff 2012/13 £000

2011/12 £000

575 33 67

186 13 22

674

221

2012/13

2011/12

Staff with permanent contract Staff with short-term contract and seconded staff

11 4

3.3 0.6

Total

15

3.9

2012/13 £000

2011/12 £000

72 76 2 166 113 30 10 9

51 76 36 76 0 56 9 3

478

307

Salaries Social security costs Contributions to pension scheme

2.4 Average number of employees Category of staff

3. Other administration costs

Board fees and expenses Shared services Legal fees Running costs Direct support for panel Training, recruitment and other staff costs Auditor remuneration Internal auditors’ remuneration

4. Trade and other receivables 4.1 Amounts falling due within one year

Other receivables Prepayments

2013 £000

2012 £000

19

12

3

0

22

12

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

4.2 Intra governmental balances Receivables: amounts due within one year 2013 £000

Receivables: amounts due within one year 2012 £000

Balances with other central government bodies Balances with bodies external to government

16 6

12 0

at 31 March

22

12

2013 £000

2012 £000

Balance at 1 April Net change in cash and cash equivalents

377 84

0 377

Balance at 31 March

461

377

Bank accounts

461

377

at 31 March

461

377

5. Cash and cash equivalents

All bank balances at 31 March 2013 are held in commercial banks.

6. Trade and other payables 6.1 Amounts falling due within one year 2013 £000

2012 £000

Trade payables

68

57

Tax and social security

16

8

8

28

82

78

174

171

Other creditors Accruals

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

6.2 Intra governmental balances Payables: Payables: amounts due amounts due within one year within one year 2013 2012 £000 £000 Balances with other central government bodies

42

76

Balances with bodies external to government

132

95

at 31 March

174

171

7. Pensions Information about the assumptions underlying the figures in this note can be found in Note 1.5 Employee benefits.

Retirement benefits Statement of Financial Position Year ended:

2013 £000

2012 £000

151

37

(159)

(36)

Net (under)/overfunding in funded plans

(8)

1

Net (liability)/asset

(8)

1

Amount in the Statement of Financial Position

0

0

Liabilities

8

0

Assets

0

1

(8)

1

Fair value of employer assets Present value of funded obligations

Net (liability)/asset

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Notes to the statement of comprehensive net expenditure Year ended: 31 March 31 March 31 March 31 March 2013 2013 2012 2012 £000 % £000 % Current service cost

67

17.5%

22

16.3%

4

1.0%

1

0.7%

Expected return on employer assets

(5)

(1.3%)

(1)

(0.7%)

Total included in member costs

66

17.2%

22

16.3%

Actual return on plan assets

13

0

.

Interest on obligation

Notes to the statement of changes in taxpayers’ equity Year ended:

31 March 2013 £000

31 March 2012 £000

8

(1)

Actuarial losses on obligation

(25)

(2)

Actuarial loss recognised in statement of changes in taxpayers’ equity

(17)

(3)

Cumulative actuarial loss recognised in statement of changes in taxpayers’ equity

(20)

(3)

31 March 2013 £000

31 March 2012 £000

Opening defined benefit obligation

36

0

Current service cost

67

22

4

1

Contributions by members

27

11

Actuarial losses

25

2

159

36

Actuarial gains/(losses) on plan assets

Reconciliation of defined benefit obligation Year ended:

Interest on obligation

Closing defined benefit obligation

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Reconciliation of fair value of employer assets Year ended:

31 March 2013 £000

31 March 2012 £000

37

0

Expected return on assets

5

1

Contributions by members

27

11

Contributions by the employer

74

26

8

(1)

151

37

31 March 2013 £000

31 March 2012 £000

4

1

Expected return on assets

(5)

(1)

Other finance (income)/cost

(1)

0

31 March 2013 £000

31 March 2012 £000

151

37

(159)

(36)

(8)

1.

Experience gains/(losses) on assets

8

(1)

Experience losses on liabilities

0

(1)

Actuarial losses on obligation

(25)

(2)

Actuarial losses recognised in statement of changes in taxpayers’ equity

(17)

(3)

Opening fair value of employer assets

Actuarial gains/(losses) Closing fair value of employer assets Notes to the statement of comprehensive net expenditure Year ended:

Interest on obligation

Amounts for the current and previous accounting periods Year ended:

Fair value of employer assets Present value of defined benefit obligation (Deficit)/surplus

33


Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Analysis of projected amount to be charged to operating profit for the year to 31 March 2014 Year ended:

31 March 2014 £000

% of pay

Projected current service cost

92

23.7%

Interest on obligation

10

2.6%

Expected return on plan assets

(9)

(2.3%)

Total

93

24%

31 March 2013 % p.a.

31 March 2012 % p.a.

Pension increase rate

2.8

2.5

Salary increase rate

5.1

4.8

Expected return on assets

4.5

5.8

Discount Rate

4.5

4.8

Year ended:

The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the timescale covered, may not necessarily be borne out in practice. Mortality assumptions have been based on the Fund’s VitaCurves, with improvements from 2008 in line with the medium cohort and a 1% p.a. underpin. Breakdown of the expected return on assets by category Year ended:

31 March 2013 % p.a.

31 March 2012 % p.a.

Equities

4.5

6.2

Bonds

4.5

4.0

Property

4.5

4.4

Cash

4.5

3.5

34


Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Year ended:

31 March 2013 £000

31 March 2012 £000

119

29

Bonds

12

3

Property

14

4

Cash

6

1

Total

151

37

Equities

8. Commitments under leases CHS has no commitments under non-cancellable operating leases. CHS occupies office space in 2/1/1 Ladywell House under a Memorandum of Terms of Understanding with National Records of Scotland (NRS). The agreement is for five years and CHS pays NRS £42,000 p.a. for rent and rates.

9. Financial Instruments As the cash requirements of CHS are met through grant-in-aid, financial instruments play a more limited role in creating and managing risk than would apply in a non-public sector body of a similar size. The majority of financial instruments relate to cash or cash equivalents and to contracts for nonfinancial items in line with CHS’ expected purchase and usage requirements. CHS is therefore exposed to little credit, liquidity or market risk.

10. Related party transactions CHS is a Non-Departmental Public Body sponsored by the Care and Justice Division in the Children and Families Directorate. CHS receives funding from the Care and Justice Division in the Children and Families Directorate which is regarded as a related party. During the year CHS had a number of transactions with other government departments and agencies. No Board Member, key manager or other related party has undertaken any material transactions with CHS during the year.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

11. Special payments A special payment was made which requires disclosure under the Scottish Public Finance Manual guidelines. See paragraph 2 of the Remuneration Report for details.

12. Contingent liabilities CHS has no contingent liabilities as at 31 March 2013.

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Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Annex 1 Direction by the Scottish Ministers

37


Children’s Hearings Scotland | Annual Report and Accounts 2012/13

Annual Report and Accounts Year ended 31 March 2013

38

CHS Annual Report and Accounts 2012/13  
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